By Shabiya Ali Ahlam
The Employers’ Federation of Ceylon (EFC) has put forward to the government a 10-point proposal that would help cushion the private sector from possible labour issues and ensure its ability to continue to operate amid the challenges the businesses are currently faced with, due to the economic fallout of the COVID-19 crisis.
While the businesses are looking to get back on track after a two-month-long work stoppage, the majority, if not all, are faced with financial challenges, due to a sharp drop in revenue, which has a spillover effect on employees.
To provide the much-needed financial relief, the EFC urged the government to extend a fiscal and financial stimulus package for the employers to help address the depletion of working capital.
“Working capital loans must be provided at low interest rates for at least three months, where they should be 4 percent over and above the existing credit facilities and without provision of collateral and personal guarantees,” the proposal said.
The EFC further called for the revision of special grants and interest-free credit facilities to pay wages for the months of April to September, as an alternative.
While seeking permission to allow employers to set off at least the salaries and wages they paid during the curfew period, as well as for months of April to December 2020, against the future VAT and NBT payments, the EFC requested the government to look at the possibility of extending special tax incentives to the employers who hire new employees, engage new trainees, provide for skill training/certification under the skill
Taking into account the issues faced by the employees, where almost all are facing pay cuts and some are likely to lose their jobs, the EFC suggested the relevant authorities to promote and encourage enterprise-level arrangements that should be arrived after discussions with employees to cover up the lost working hours and operate at higher efficiency levels.
To facilitate the same, the EFC noted that the relevant authorities should look at allowing work arrangements that are aimed at covering up for the lost hours through extended hours of work as well as deployment for work on weekends and holidays.
Its proposal also included allowing ‘loaning of employees’ to other employers, without any legal or shareholding linked to the principal employer, if possible.
With regard to payment of wages, the EFC suggested prorated payments of wages and other benefits and or revision of terms be promoted in the short to midterm, in support of the immediate recovery efforts and work methods such as job sharing, part-time work and work from distant location.
Furthermore, it suggested the promotion of measures such as ‘furloughs’, which is long periods of no-pay leave that even allow employees to work elsewhere to engage in self-employment activities, until they are recalled for work.
The federation also said the employers should be encouraged to retain employees in service by allowing employers to offer half a month’s work and pay half a month’s consolidated salary, for the days worked.
It suggested the balance half month (non-working days) be paid at the rate of half (50 percent) of the wages board-stipulated minimum wage (considering that no work will be performed by them for half the month).
The 10-point list also included the possibility to allow employers to temporarily lay off workers by paying a percentage of the wage or an allowance that does not attract (EPF/ETF). The EFC said the latter could be offered to hardest-hit employers, who are not in a position to pay full wages to employees.
EFC’s 10-point proposal
1. Provide fiscal and financial stimulus packages recognising the depletion of working capital
2. Allow employees to resume operations with maximum health protection but minimal red tape
3. Promote and encourage enterprise-level arrangements to cover up lost working hours and operate at higher
4. Promote new work methods and create jobs/work
5. Payment of wages and other terms and conditions
6. Encourage employers to retain employees in service by offering half a month’s work
7. Allow employers to temporarily lay off workers by paying a percentage of wage or by paying an allowance that does not attract EPF/ETF
8. Revisit the classification made in relation to essential services
9. Set up job banks and placement centres
10. Promote skill recognitions and certification, including prior learning